China Expert

By Terri Morgan

Problems that may result from cultural differences in business are compounded by the fact that even though a native speaker of one language has learned the other person’s language, he or she may not have been sufficiently exposed to actual usage of the target language. Mistakes in usage can occur even when grammar and pronunciation are correct.

Until recently, few Americans had been directly exposed to Chinese language and even fewer had learned how to speak Chinese. This is changing. Beginning in the 21st century, more and more people outside China have begun learning the language.

It is important to distinguish ethnicity, nationality, and language. This is done naturally by most western people since western nations have many generations of immigrants from varied ethnic backgrounds. An American whose grandparents immigrated to the US from China may not speak Chinese at all or could be learning it as a second language. It is not as common for Chinese people to make these distinctions. Read the rest of “Language and Communication in China” or post a comment

By Wang Jun and Stephen Lou

Termination due to financial difficulties

Under the second financial difficulties option, Article 41 of the PEL provides that employer may terminate employees without their consent. Under this option, employment may be terminated and, but for a one time severance compensation to be paid at the time of termination, the employer will no longer be required to continue to pay employee salaries.

Legal Requirements

In order for the employer to utilize this termination option, the employer must satisfy two legal requirements. First, the employer must show that it is in fact suffering financial difficulties. Second the termination must apply to more than either 20 employees or 10% of the employees at one time.

In regard to the first requirement, the Chinese law merely provides a broad provision with no strict and specific requirement to determine how the financial difficulties requirement is met. Read the rest of “Practice and Procedures for Termination of Employees Due to Financial Difficulties in China – Part 2″ or post a comment

By Ross Parsonage

It is no secret that protecting intellectual property rights (‘IPR’) and maintaining good product quality in China is a challenge. Recent media coverage of controversies like tainted cough syrup, toxic pet food and lead poisoned toys has raised general concern about the Chinese legal system and its apparent inability to reduce problems with piracy and the maintenance of product quality.

These recent controversies and the ever-present problem of counterfeiting have damaged the ‘Made in China’ label. Public perception about Chinese-made products is not particularly favourable and it will take some time to repair the damage. This is at least in the short term bad news for Chinese firms and foreign ventures manufacturing in China. It is no wonder then that companies that have yet to make the move into the Chinese market are currently hesitating; unsure of the impact that a move into the Chinese market will have on their business. Read the rest of “Changing Attitudes to IP and Product Quality Issues in China – Part 1″ or post a comment

By Seth Berman

Easy to follow quality control guidelines for people purchasing from Chinese manufacturers.

Ok, so quality control is never easy. But, there are some basic guidelines that, if you follow them like the law, will make your life a lot easier. Most large companies outsourcing with Chinese suppliers have systems in place, and I’ve found them all to be remarkably similar. These concepts go beyond home furnishings, as I’ve seen them applied in the shoe, garment, and electronic industries. Below is a basic summary of the key elements.

Create Master Standards

Master Standards are items which the factory, your company, and anybody looking for details on a product should refer to.

Written Orders and Specification Sheets: The written order is the bible. Make sure you have a very detailed spec sheet for every product. Take the time to create a form for your company that is submitted with every order, so the supplier knows exactly the specs you require. Read the rest of “Quality Control in China: 5 Basic Steps” or post a comment

By David Dayton

Opportunities in China

Like I said in the introduction, it’s not all bad news here. Factories want orders!! Of course, everyone wants them, but factories that are still in business have employees and need to pay for them so they are aggressively looking for new orders. This means that buyers with cash are in a great position. Indeed, if your own financial house is in order, this recession can be a gold mine.

First, factories are willing to do projects with much more creative terms than they would have even considered before. The key is to remember that they don’t necessarily trust you. But as long as they have some guarantees they can be surprisingly flexible. Security for your supplier in China is key to getting what you want at the best possible prices.

Second, lower MOQ’s are available for just about any order. Factories that wouldn’t talk with us last year are calling back and asking to meet and talk about projects (long since completed elsewhere) and future opportunities. We’re hearing from scores of former suppliers interested in projects they rejected outright before. We’re doing projects for a couple of clients now with qtty’s that are almost ½ what we were originally told were the MOQ’s. Read the rest of “China: Sourcing in Bad Economic Times – Part 2″ or post a comment